The Recession Is Now One Year Old

So says Floyd Norris. So say we all:

First Birthday for the Recession?: The Federal Reserve chairman, Ben S. Bernanke, declined on Monday to say whether we are in a recession. The only reason to avoid doing so is that it would not be reassuring to admit the obvious. The National Bureau of Economic Research has yet to certify there is a recession, but otherwise there is no doubt.... [J]ust as he began his testimony, the Conference Board released its index of coincident indicators. That index not only confirmed that a recession is under way, but it provided powerful evidence that it began in 2007, or in January 2008 at the latest.

The overall index of coincident indicators is down 1.2 percent from its record high, set in October 2007. Since 1960, every time the index has fallen by at least 1 percent, the bureau later concluded the economy was in recession. The argument now is when the recession began. Those who scorned the idea that there was a downturn earlier this year now say it began in the third quarter of this year. They pointed to growth in gross domestic product in the second quarter as proof there was no recession, but that argument is unpersuasive.... G.D.P. growth is only one indicator the bureau uses. The others are real income, employment, industrial production and wholesale-retail sales. Those are the four items that make up the index of coincident indicators.

In the seven recessions since 1960 — the only ones during which the index of coincident indicators was calculated — the bureau later concluded that the recession began within two months of the beginning of the decline in the coincident indicators. This time the index began to decline in November 2007. So the possible range is from September to January. In all likelihood, this recession either has reached its first birthday or will soon do so.

Since World War II, only two recessions have lasted a year or more. Both the 1973-75 and the 1981-82 downturns lasted 16 months. This recession is likely to last longer than that. If so, it will become the longest downturn since the 43-month recession that lasted from August 1929 to March 1933...

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The Recession Is Now One Year Old

So says Floyd Norris. So say we all:

First Birthday for the Recession?: The Federal Reserve chairman, Ben S. Bernanke, declined on Monday to say whether we are in a recession. The only reason to avoid doing so is that it would not be reassuring to admit the obvious. The National Bureau of Economic Research has yet to certify there is a recession, but otherwise there is no doubt.... [J]ust as he began his testimony, the Conference Board released its index of coincident indicators. That index not only confirmed that a recession is under way, but it provided powerful evidence that it began in 2007, or in January 2008 at the latest.

The overall index of coincident indicators is down 1.2 percent from its record high, set in October 2007. Since 1960, every time the index has fallen by at least 1 percent, the bureau later concluded the economy was in recession. The argument now is when the recession began. Those who scorned the idea that there was a downturn earlier this year now say it began in the third quarter of this year. They pointed to growth in gross domestic product in the second quarter as proof there was no recession, but that argument is unpersuasive.... G.D.P. growth is only one indicator the bureau uses. The others are real income, employment, industrial production and wholesale-retail sales. Those are the four items that make up the index of coincident indicators.

In the seven recessions since 1960 — the only ones during which the index of coincident indicators was calculated — the bureau later concluded that the recession began within two months of the beginning of the decline in the coincident indicators. This time the index began to decline in November 2007. So the possible range is from September to January. In all likelihood, this recession either has reached its first birthday or will soon do so.

Since World War II, only two recessions have lasted a year or more. Both the 1973-75 and the 1981-82 downturns lasted 16 months. This recession is likely to last longer than that. If so, it will become the longest downturn since the 43-month recession that lasted from August 1929 to March 1933...